8 Best Stocks To Buy For Beginners Right Now

3. Alphabet Inc. (NASDAQ:GOOGL)

10-Year Revenue CAGR: 18.36%

Number of Hedge Fund Holders: 216

Alphabet Inc. (NASDAQ:GOOGL) is the parent company of Google, a multinational technology company that specializes in Internet-related services and products. Google’s core products include search engines, cloud computing, advertising technologies, hardware, software, and other internet-based services. It also owns other companies, such as Waymo (self-driving cars), Verily (life sciences), and DeepMind (artificial intelligence).

Google Cloud’s revenue grew by 28.8% in Q2, surpassing $10 billion. This contributed to a 13.59% overall revenue growth for Alphabet Inc. (NASDAQ:GOOGL). Net income was $23.6 billion. Google’s ad revenue increased to $48.5 billion in Q2, accounting for nearly 60% of Alphabet Inc.’s (NASDAQ:GOOGL) sales. YouTube’s ad sales also grew to $8.7 billion. Both YouTube Ads and Google Cloud are projected to reach a $100 billion revenue run rate by the end of 2024.

AI infrastructure and GenAI tools have generated billions in revenue for Google. Over 2 million developers are now using these tools. Google dominates the search engine market with ~91.06% and plans to invest $50 billion in AI initiatives by the end of 2024. AI technologies are enhancing user engagement and advertising efficiency on platforms like YouTube and search.

This company is a promising investment option. Renowned investor Bill Ackman has invested over 20% of his portfolio in the company, and Wall Street analysts are predicting a 20% increase in its stock price within the next year. It remains a financial powerhouse with strong financials and positive analyst sentiment.

Patient Capital Opportunity Equity Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q2 2024 investor letter:

“Alphabet Inc. (NASDAQ:GOOGL) was a top contributor in the second quarter, finally catching up to its peers in the Magnificent 7. The company gained 20.8% in the period following strong first quarter earnings, a new $70B repurchase program (3% of shares outstanding) and the initiation of a cash dividend ($0.20 per share; 0.42% yield). We continue to believe the market underappreciates Google’s exposure to AI with its Gemini model being integrated into search results, YouTube advertising and its cloud offering. We continue to think that the cloud players will be the AI winners in the long-term, with Google being well positioned to take advantage. While the company trades at 24x 2024 earnings, if you remove the money-losing and under-earning businesses, you realize that you are paying below a market multiple for the core Google business. We do not believe there are many other AI winners trading at such an attractive multiple.”